USA Gymnastics declares bankruptcy in wake of sex abuse scandal

USA Gymnastics declares bankruptcy in wake of sex abuse scandal
REUTERS/Brendan McDermid/File Photo - Victims and others look on as Rachael Denhollander speaks at the sentencing hearing for Larry Nassar, a former team USA Gymnastics doctor who pleaded guilty in November 2017 to sexual assault charges, in Lansing, Michigan, U.S., January 24, 2018.
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Facing a mountain of lawsuits over the Larry Nassar sexual abuse scandal, USA Gymnastics filed for bankruptcy Wednesday.

The beleaguered organization has been beset by financial struggles, leadership turnover and arrests as it has sought to contain a scandal sparked by Nassar, the longtime team doctor accused of molesting hundreds of young women and girls.

"We owe it to the survivors to resolve, fully and finally, claims based on the horrific acts of the past and, through this process, seek to expedite resolution and help them move forward," said Kathryn Carson, who was recently elected chair of the USA Gymnastics Board of Directors.

Lawyer John Manly, who represents 180 alleged victims of Nassar, called the bankruptcy filing the "inevitable result of the inability of this organization to meet its core responsibility of protecting its athlete members from abuse."

"The leadership of USA Gymnastics has proven itself to be both morally and financially bankrupt," Manly added. "They have inflicted and continue to inflict unimaginable pain on survivors and their families."

Nassar, who also worked for Michigan State University, was sentenced in January to up to 125 years in prison after he pleaded guilty to molesting 10 girls.

Then in October, Steve Penny, who resigned last year as president and chief executive of USA Gymnastics, was arrested on felony charges of tampering with evidence in connection with a Texas investigation into Nassar.

Penny's arrest came six months after an NBC News investigation revealed that he had reached out to several top U.S. gymnasts in what they believe was an attempt to silence them as the Nassar scandal was unfolding.

Text messages, emails and other materials supported the claims by athletes and parents that Penny and others at USA Gymnastics stressed discretion above all else, even as the gymnasts and their parents pushed to meet with law enforcement officials. The gymnasts told NBC News that they felt that not following Penny's warnings would jeopardize their potential spots on the Olympic team.